Am I losing out here - not sure I understand the scheme

[WTFH]

At what rate are you paying them back for the personal miles?




Have you checked with them that they haven't made a mistake in the fuel card/car allowance?

[ASB]

You can at least claim the difference between the fuel rate and AMAP at through your SATR.

I also convert my car allowance into salary and get a fuel only business mileage payment.

I would prefer to get the full allowance but that is not going to happen of course. The wear and tear on the car is nominally funded by the car allowance.

In numbers terms it depends on so many factors.

[Magpie252]

TL;DR - I think the simple answer here is Yes

From my Permie days, the question was always between taking a company car (and the tax implications) or running a private car as part of a Car allowance

Running a car on behalf of an employer was always made up of two components:
Car Allowance: To cover the purchase & depreciation of a car (but subject to income tax)
Petrol Allowance: To cover the running costs of the car(i.e. Fuel, tyres, repairs etc.) tax free if you stick to the 45p/mile 10K allowance

Company cars were typically on a 3 year/60,000 mile lease, servicing, insurance, repairs, RAC etc. all included
Petrol, typically on a fuel card, some companies claiming back personal mileage, the whole package having an impact having an impact on your income tax

By taking a fuel card, your effectively giving up a stack of money to cover the running costs of the car. In effect, you’re paying them to run your own car

A worked example:
Petrol £5.00/gallon, car returns 35mpg, 15K business/ 5K personal mileage, £30K car 50% depreciation over 3 years

‘Real’ car allowance:
Employer contribution (less 40% tax) £2,880
10,000 miles @ 45p £4,500
5,000 miles @ 25p £1,250
572 gallons petrol -$2,860
Vehicle depreciation -£5,000
Total Nett £770


Your situation:
Employer contribution (less 40% tax) £2,880
5,000 miles @ 21p -£1,050
Vehicle depreciation -£5,000
Total Nett -£3,170

[tarbera]

If you need 4 new tyres who pays ?

[SpontaneousOrder]

Remember you need business use on your insurance too.

[dmini]

Assuming that you are paid a lump sum then rate of 13p/mile ish you should be able to claim back some of the tax difference from HMRC - unless it has changed massively in the last year or so. Your lump sum is treated as salary
Easy figures called for here.
10,000 miles - their rate is 15p/mile
That means they have underpaid you by 30p/mile or £3000.
You have to do self-assessment - but it means you get Mileage allowance relief - see the examples on this page Latest News :: Taxation
Hope that helps

[vwdan]

Edit: Just realised the title was a bit crap. TL;DR - Gone permie, don't understand the business mileage system.

So, I'm trying the permie* thing for a few months and I've been left a little confused by their mileage practices. I have a car allowance so have to sort my own car. However, rather than claim 45ppm I'm going to have a Fuel Card. Apparently, I use this card to fill up and then I have to record my cars mileage each month, record business journeys and then pay them back the difference (i.e., the personal factor).

This gets paid back using the Advisory Fuel Rates (https://www.gov.uk/government/public...september-2015) which quite clearly state that they're geared up for company cars.

Although it'll be nice not having to front my fuel costs (especially as most of it will be business), from what I can tell, I feel like I'm going to wind up losing out on this - I've had car allowances before, but just claimed the 45ppm for business mileage which then goes on to cover proportional wear and tear. If I do 10,000 bus miles and 1,000 personal then they pay the majority of the servicing. If it's the other way then I do - seems fair.

The person I spoke to didn't really know too much about it, apart from saying the car allowance is there to cover things. That's all well and cute, but a £400pcm car allowance winds up being £232pcm in my bank - they want a newish car, I need one that's going to be comfy over long distances and then there's a world of difference in day to day cost between doing 8000 miles a year and 30,000 miles a year. I'm not convinced £3k a year is going to cut it.

*I'm not going to lie - it's definitely going to be a tough transition if I'm going to make it work. I'm going to be keeping a very close eye on the changes next year.